Social Media ROI: Three Ways Digital Marketers Can Show its Worth

If you’re not showing C-suite executives exactly what you make off your social media marketing program, show them how much money they’re saving.

ROI: Beyond the Dollar Bills

That’s one of the messages from social media metrics analyst Cappy Popp of Thought Labs. To make the most of social media marketing, digital marketers, Popp said, can define social media metrics in three ways: activity, engagement and acquisition -- and do a lot of it with free tools.

“ROI no longer just means money to a lot of C-Suite executives,” said Popp, who caught up with his us after his presentation last month at the Kentico Connection conference in Burlington, MA. “They also see it as a cost-savings measure and also see it as a brand-mention or personality play. It can also be for crisis management and crisis aversion.”

Activity: Tracking Content

Digital marketers should be tracking the type of content they post, and the frequency it’s posted.

“It will allow you to easily determine what content actually resonates with your community,” Popp said. “And therefore, you can also optimize when you post your content to save money. Basically, you’re saving dollars for doing less work, which affects your bottom line.”

Free tools also affect bottom lines.

Facebook, Popp said, provides new tools in its free Page Insights app that shows when a page's fans are online and most likely to engage with its content. Free tools like Buffer make it incredibly easy to optimally publish posts on all major networks based on algorithms that determine when your posts get the most engagement on a specific network, Popp added.

“It makes the most sense to do some manual work up front to determine -- through experimentation using the data each platform provides -- when your posts get the highest engagement and then test posting at different times to validate this,” Popp said. “Automated tools like Buffer analyze a discrete time period so it's important that they get the most accurate data possible before you depend upon them too heavily.”

Engagement: How Does Your Audience Evolve?

You’ve grown your fan base. That’s all good. But what is the value of those fans? What kind of engagement do you have?

“We hear a lot of people talking about the number of fans they have,” Popp said, “and these tend to be value metrics that don’t work as well anymore because they don’t really mean that much by themselves.”

However, see how your audience has changed over time and compare that to historical data and your competition. Are you behind? In which areas has your audience grown on a demographic scale?

Traditionally, organizations have been taking their total number of fans on their social media sites and dividing that by the total number of likes, shares, comments and all types of interaction.

But for better engagement measures, organizations can use total engagement as it relates to total reach. How? For Facebook, add the likes, comments and shares and divide that by the total number of fans to get an engagement rate.

Question the Data

Take this data, however, for what it’s worth. It includes data from non-fans and relates them to fans. Users don't have to be fans to like, comment or share a page's content.

“If you divide all engagement by total fans you are inflating the engagement rate because non-fan interactions are included,” Popp said.

And remember -- traditional calculations don't necessarily include other important activities such as clicks on a post, views of a video or views past a call to action within a video.

Further, this approach can interpret one person’s likes as dozens of unique users, not a single one.

“Most importantly, traditional approaches don't take reach into account,” Popp said. “Facebook severely limits the number of people that see a page's content organically. Traditional methods relate engagement to total fans; however, a vanishingly small percentage of these fans may have ever had the opportunity to interact with the content in the first place because they never saw it.”

Better Method: Engagement Divided by Reach

Using total engagement divided by total reach is much more accurate:

Total engagement: includes all activity taken on a piece of content, not just likes, comments and shares.

Total reach: includes fans and non-fans and also takes into account the number of user that actually saw the content.

“You can see where your data is being used and seen,” Popp said. “If you’re targeting the wrong people, and your messaging doesn’t reach the people you’re targeting, you’re wasting your money. We see a lot of that being a problem.”

Acquisition Metrics: Finding Your Top Fans

Acquiring your top fans can be done via a number of different platforms, whether it’s manually or with social analytics tools.

Ultimately you’re looking to see if your social media presence has an impact on your web traffic. Tools like Google Analytics' free social acquisition reports make it “easier than ever to track conversions through social media channels online,” Popp said.

You can track which social networks sent you the most traffic, which users saved your social content, which landing pages users hit on your site when coming from social networks, activity from social plugins like the Google+ +1 button or the Facebook social plugins.

“Tools like these were very expensive and difficult to use until recently and now Google is giving them away free of charge,” Popp said. “There's no reason not to use them.”

Remember Organization Vision

Definitely not. However, be sure when trying to “sell” your social media marketing program that while these formulas and tools may produce sharp charts and bar graphs for the execs, you must reflect on your organization’s mission through its social media platform.

What were the original goals? And does your program produce tangible results that adhere to those goals?

We’re thinking the answers to these questions on a couple of slides for the executives meeting will be even more impressive.

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